By JOHN COOK, P-I REPORTER

Published 10:00 pm, Monday, February 6, 2006

Mike Toutonghi's entrepreneurial light bulb went off three years ago at a neighborhood barbecue in Bellevue.

A distinguished engineer at Microsoft Corp. who previously had run the company's eHome division, Toutonghi hit a technological roadblock when a buddy asked to receive a digital copy of a photograph he had just taken on his new camera phone.

"It was a real pain in the butt," Toutonghi recalled. "I hate to admit this, but it actually took me a few tries before I was able to get that photo to him."

Three years -- and countless hours of research later -- Toutonghi believes he has devised an elegant way to store digital photographs, videos and audio clips and then painlessly move them among personal computers, cell phones and other portable devices. Eventually, the 43-year-old entrepreneur sees the day when licensed content -- from U2's "One" to ABC's "Lost" -- also could be transported over the company's peer-to-peer network.

But for now, Toutonghi said he wants to create a digital photo- and video-sharing service that is easy enough for his mom to use.

Vizrea -- the name of Toutonghi's new 16-person Seattle company -- plans to unveil its service today at the annual DEMO conference in Phoenix. It enters a competitive and fast-growing market, one dominated by established players such as Shutterfly, Snapfish, Kodak's Easyshare Gallery and Yahoo!'s Flickr service.

Although many of those services do a good job of allowing people to store and share photos on their personal computers, Toutonghi said no one has been able to organize collections of photos so they can be accessed on a PC, laptop, camera phone or other device.

"We haven't seen anybody who is doing automatic transfer back and forth on your phone and PC and keeping it organized," said Toutonghi, adding that the service creates a central place for people to manage all of their digital photos.

Toutonghi has lined up some heavy hitters from his days at Microsoft to support the rollout of the free service, which he said will make money through reprints, premium subscriptions and advertising.

Brad Chase, the former senior vice president at Microsoft who previously ran MSN, and Ben Slivka, former general manager of Microsoft's consumer and commerce group, are among the local angel investors backing the company. Vizrea has raised more than $3 million, although Toutonghi declined to be more specific as the current fund-raising efforts have not been completed.

Chase, for one, is excited by the opportunity. He said there is a transformation taking place within digital photography as consumers embrace camera phones.

While they are selling at a fast rate, Chase said a large percentage of people still do not know how to transfer photos to a PC or share them with friends.

"The user experience was atrocious," said Chase, who is on the Vizrea board. "Trying to get your photos where you want them in an easy-to-use way was extremely difficult."

Vizrea isn't the only startup eyeing the mobile photo arena -- a signal that sharing and managing digital content is a hot space. Others include PixPulse, Ontela, ShoZu and Sharpcast, a venture-backed Palo Alto, Calif.-based startup that also is debuting its mobile photo service today at DEMO.

PixPulse, which is led by Seattle entrepreneur David Xue, allows users to send digital photos, videos and other content to their friends' mobile phones by SMS messages. But unlike Vizrea, PixPulse doesn't integrate photos between the PC and the camera phone.

Xue doesn't think that is such a big deal -- partly because the only camera phones capable of doing that right now are those running the Symbian operating system. Xue said those phones are so expensive, with some topping $500, that the market opportunity is quite small. Because of that, Xue said it will be difficult for Vizrea to crack the mainstream market. He also questioned Vizrea's strategy of having consumers download both a mobile and desktop application.

"For consumers, you have to make it stupid easy because they are lazy," Xue said. "Everything has to be one click, because you have just one chance to capture the consumer."

Toutonghi said Vizrea is easy to use. And, he added, it goes beyond other services that simply allow mobile photos to be uploaded to third-party Web sites.

"Nobody is really making it easy to get those photos back to where you are whenever you want to have access to them," he said.

While Vizrea is starting out with Symbian phones, Toutonghi said the company is developing its service to work on other platforms such as Java and Windows mobile. It is also developing other ways for the service to work with more basic camera phone models.

"That said, Symbian Series 60 still enjoys the lion's share of the smart-phone market," said Toutonghi, adding that Vizrea has formed a partnership with Nokia to distribute the service.

Ontela founder Dan Shapiro, whose newly formed Seattle startup also is looking to help consumers manage photos on camera phones, said the market is developing quickly as camera phone sales outpace those of traditional digital cameras.

Still, the former manager at RealNetworks and Wildseed admits that most people don't know what to do with photos from camera phones.

"They take these cute pictures of their kids and then give up on them because simple things, like putting them in an album or e-mailing them to a friend, are just too hard," Shapiro said. "Your camera phone becomes a quiet little graveyard for all the pictures you take. They're just locked up in there to die. We're trying to solve that problem."